European venture capital rebounds in fourth quarter

The European venture capital business rebounded in the fourth quarter with fundraising and IPOs up, while investments in startups grew at a smart pace.

Twenty-three venture funds raised nearly $2 billion in the quarter, the most money raised in a quarter in two years, according to a report from Dow Jones’ DJX VentureSource. Capital was up 38% from the same quarter a year ago. The number of funds fell by 12%.

As was the case in the United States, fundraising in Europe showed some concentration. The largest fund raised during the period, Abingworth Management’s Bioventures VI, accounted for 17% of the quarter’s capital.

For the year, capital raised was down 8% from 2012.

There were eight IPOs of venture-funded European companies in the quarter, the largest number of deals since the second quarter of 2010.

Investments ended the year on a reasonably strong note as well, the DJX VentureSource study shows.

Venture firms invested slightly more than $2 billion in startups in the final three months of the year, up 18% from the third quarter. The number of deals – at 357 – edged up 6%.

The top deal in the quarter was Spotify’s $253 million financing.

For the year, investments rose 15% from 2012 in terms of capital allocated.